Why Is IDV So Important For Your Two-Wheeler Insurance Policy?
- Author :
- TATA AIG Team
- Published on :
For a bike insurance policy, Insurance Declared Value is a crucial factor. The IDV in two-wheeler insurance has a significant impact on the rate of the auto insurance policy, as the premiums paid by the policyholder will be influenced by the IDV.
What is Insured Declared Value (IDV) in two-wheeler insurance?
The bike insurance price will be determined by the IDV and so, choosing the correct IDV is critical when buying the best two-wheeler insurance for yourself.
Simply put, if your bike is stolen or damaged beyond repair, subject to the verification of the claim, you, the policyholder, will receive the IDV or the total sum assured that your bike is covered for. It is the highest amount your insurance provider can pay you if your bike undergoes total loss.
How is depreciation calculated?
IDV is calculated by deducting depreciation on the manufacturer's automobile parts from the manufacturer's fixed selling price. When it comes to determining the IDV, the depreciation on the two-wheeler’s market value is crucial. It's critical to comprehend the definition of IDV as well as the legal jargon associated with it.
Importance of Insured Declared Value
The IDV is the estimated current market value of your insured vehicle and is calculated by subtracting the depreciation on the bike’s parts from the current market value of the bike.
The IDV in your two-wheeler insurance has an equally important part as well, as it determines the actual value of your bike and in turn, helps calculate the premium you will be paying.
It is necessary to state the correct IDV as it not only helps you pay reasonable premiums during the policy year but will also help you claim the right amount in case of the bike’s total loss.
Also, the Own Damage (OD) coverage premiums are measured in proportion to the IDV. Based on the vehicle's age and cubic volume, this premium will range from 2% to 3% of the IDV. Only keep in mind that the higher the IDV, the higher the premium will be, and vice versa. It would be almost impossible to arrive at the OD premium if you haven't measured the IDV for your vehicle.
A few two-wheeler owners may now believe that declaring a lower IDV than the market value is the better option. That's because the OD price on your vehicle is directly proportional to the IDV; the lower the IDV, the lower the premium. A lower IDV will save you money on premiums, but it also means you'll be paid with a lower sum assured in the event of an accident. However, if you do feel that your bike’s IDV needs to be increased, you can get in touch with your insurance provider to know how to increase the IDV value of your two-wheeler.
On the other hand, others might believe that claiming a higher IDV is a good idea, hoping that the claim amount would rise accordingly, or that if they were to sell their two-wheelers, it will fetch a higher price than the real market value. However, this would also mean paying higher premiums for the policy year.
It is better to have an IDV that is similar to the market value of your vehicle. Lowering the IDV value lowers the premium, but it still means you have less coverage than is needed. Also, remember that the IDV of your two-wheeler declines as it gets older.
Why is it critical to select the correct IDV?
The IDV is extremely critical, particularly when it comes to renewing a motorcycle insurance policy. At Tata AIG, we offer competitive rates on the bike insurance price and will guide you on the right course of action. Consider all of the choices before making a decision!
Choosing the right IDV is necessary because it not only influences your insurance premium but also your insurance claim. If you pick an IDV that is far lower than your vehicle's market worth, you will get a very poor claim if the two-wheeler is stolen or completely destroyed.
Therefore, choosing an IDV that is nearest to the market value of your bike becomes critical. In adverse situations, TATA AIG two-wheeler insurance will reimburse the amount equivalent to the IDV of your car.
In bike insurance, the IDV is one of the most important aspects that decide your two-wheeler insurance premium. When comparing bike insurance quotes from various insurers, it is crucial to keep your IDV constant since this will help you pick the best coverage for your two-wheeler.
To be sure that you get the correct IDV amount, you can visit your insurance provider’s website to use their IDV calculator and calculate the IDV of your two-wheeler.
Here are some Frequently Asked Questions you may want to refer to:
1. Does IDV matter in bike insurance?
A bike insurance policy's Insurance Declared Value is a crucial factor. It has a significant impact on the rate of the auto insurance policy. It is the coverage amount provided by a bike insurance provider to a policyholder at the time of a claim.
2. Can we increase the IDV value of the bike?
Most insurance providers enable the adjustment of the bike’s IDV. However, it is recommended that instead of increasing or decreasing the amount, the policyholder should choose the IDV that is closest to the bike’s market value.
3. Should I increase IDV value?
It is possible to raise this value, although this is not a standard practice. However, if you, the policyholder, do not mind paying higher premiums, then you can get in touch with your insurance provider to have the IDV increased.
4. Why is IDV important?
The Insured Declared Value (IDV) is the total sum assured settled by the insurance company and reimbursed to you (the two-wheeler owner/policyholder) in the case of the theft or complete damage of your bike.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.